The amended Finance Bill 2024 proposes freezing Non-filers Banks Accounts to enforce tax compliance, alongside changes in mobile phone sales tax policy

The Pakistani government is taking a significant step towards enforcing tax compliance with the introduction of the amended Finance Bill 2024. One of the key proposals in this bill is the potential blocking of Non-filers Banks Accounts. This measure is aimed at ensuring that all citizens fulfill their tax obligations and contribute to the country’s revenue.

What Does Freezing Non-filers Banks Accounts Mean?

Under the new proposal, the Federal Board of Revenue (FBR) will have the authority to freeze the bank accounts of individuals who fail to file their tax returns. These Non-filers Banks Accounts will be blocked if the account holders do not respond to tax notices. While deposits will still be permitted, withdrawals will be restricted until the non-filers comply with filing requirements and their names appear on the Active Taxpayers List (ATL).

How the Blocking of Non-filers Banks Accounts Will Work

The process for freezing Non-filers Banks Accounts involves issuing an income tax general order (ITGO) by the FBR. This order will list the names of non-filers whose accounts are to be blocked. The aim is to pressure non-filers to comply with tax regulations and file their returns promptly.

Impact on Non-filers and Compliance

The proposal to block Non-filers Banks Accounts is expected to have a substantial impact on tax compliance in Pakistan. By restricting access to funds, the government aims to incentivize non-filers to meet their tax obligations. This move is seen as a way to increase the number of active taxpayers and boost tax revenue.

Changes in Sales Tax Policy on Mobile Phone Imports

In addition to the measure on Non-filers Banks Accounts, the amended Finance Bill 2024 also proposes changes to the sales tax policy on mobile phone imports. The current 18% sales tax on imported mobile phones may be replaced with a fixed sales tax amount, which will vary depending on the brand. This change aims to simplify the tax structure and make it more predictable for importers.

Revising Disallowance of Sales Promotion and Advertising Expenses

The government is also considering revisions to the policy on disallowing sales promotion and advertising expenses. In the 2024-25 budget, 25% of these expenses under royalty arrangements were disallowed. The government is now looking at three options: reducing the disallowance rate to 20%, restoring the original status of the law prior to the Finance Bill 2024, or allowing a certain percentage of these expenses.

Final Decisions Pending

The final decisions regarding the blocking of Non-filers Banks Accounts and other proposed changes will be confirmed once the amended Finance Bill 2024 is formally presented and approved. These measures aim to improve tax compliance and adjust tax policies to better suit economic conditions and business needs.

Ensure Compliance with Expert Help from Tax Jurist Pakistan

Navigating the complexities of tax regulations can be challenging, especially with new measures like the freezing of Non-filers Banks Accounts. Don’t risk having your bank accounts blocked—ensure you’re on the Active Taxpayers List (ATL) with the help of Tax Jurist Pakistan. Our online tax services make it easy and convenient to file your tax returns accurately and on time. Let our experts guide you through the process and provide you with the peace of mind that comes from knowing you’re fully compliant. Contact us today to get started on your tax return filing!